U.S. Steel Expects Strong Shipments To Aid Flat-Rolled In Q1
Zacks Investment Research | Mar 22, 2020 10:28PM ET
United States Steel Corporation (NYSE:X) has issued guidance for first-quarter 2020.
The company projects adjusted EBITDA of around $30 million for the first quarter. Adjusted loss per share is expected to be roughly 80 cents.
Per U.S. Steel, its flat-rolled operations have performed well through the first quarter. It is also realizing the financial and operational benefits of the investments in its assets over the years. The segment is expected to report better-than-expected results in the quarter. Per the company, continued cost improvement, strong operating performance across all regions and seasonally strong shipment volumes are expected to more than offset the typical seasonality of mining. Notably, the domestic market for flat-rolled steel remained healthy so far in the first quarter.
In April, U.S. Steel will start the structured indefinite idling of its iron and steelmaking operations at Great Lakes Works outside of Detroit, MI. The company expects to indefinitely idle the Great Lakes Works hot strip mill before the end of 2020. Also, it is currently expected to start a planned 48-day outage in April at its Gary Works blast furnace no. 4.
Meanwhile, conditions in Europe remain volatile and the Tubular market continues to be challenging. Steel selling prices have steadily increased in Europe throughout the first quarter, which is leading to a better-than-expected performance in the USSE unit till now. However, elevated raw material costs as well as lower prices on the company’s monthly and quarterly contracts remain concerning for the near term. U.S. Steel is focused on preserving liquidity and cash amid the current market volatility.
The Tubular business is witnessing challenging conditions as oil prices remain considerably under pressure and rig counts continue to be low. The company is monitoring the recent changes in market conditions related to its Tubular business.
Further, U.S. Steel is monitoring the impacts of the coronavirus pandemic, and following the policies and procedures issued by health and government officials. It is not certain for how long the situation might last and how it might impact the company’s annual results. However, U.S. Steel’s regional supply chain provides advantage as it minimizes the risk of considerable disruptions from supply-chain-related issues. The company is monitoring the demand levels and is expected to provide more information during its first-quarter earnings call.
Shares of U.S. Steel have lost 72.3% in the past year compared with the Original post
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